Ritt Ranch & Farm is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Ritts products. Pricing and cost information on 3 of Ritts most popular products are as follows.

Item		Standalone Selling Price (Cost)
Mini-trencher		$3,350	($1,875)
Power fence hole auger		1,325	($820)
Grain/Hay dryer		13,800	($11,500)

Respond to the requirements related to the following independent revenue arrangements for Ritt Ranch & Farm.

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(a)

On January 1, 2014, Ritt sells augers to Mills Farm & Fleet for $51,675. Mills signs a 6-month note at an annual interest rate of 12%. Ritt allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Ritt estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Ritts costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Ritt on January 1, 2014. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
January 1, 2014	Inventory Commission Revenue Cash Refund Liability Estimated Inventory Returns Unearned Sales Revenue Payable to Consignor Sales Revenue (Dryers) Finished Goods Inventory Unearned Sales Revenue (Dryers) Commission Expense on Consignments Accounts Receivable Service Revenue (Maintenance Plan) Service Revenue (Installation) Notes Receivable (Mills) Unearned Service Revenue (Maintenance Plan) No Entry Sales Revenue Unearned Service Revenue (Installation) Inventory on Consignments Cost of Goods Sold
	Finished Goods Inventory Sales Revenue (Dryers) Unearned Service Revenue (Maintenance Plan) Unearned Sales Revenue Service Revenue (Maintenance Plan) No Entry Inventory on Consignments Sales Revenue Notes Receivable (Mills) Service Revenue (Installation) Unearned Service Revenue (Installation) Inventory Cash Cost of Goods Sold Estimated Inventory Returns Refund Liability Accounts Receivable Commission Expense on Consignments Payable to Consignor Commission Revenue Unearned Sales Revenue (Dryers)
	Estimated Inventory Returns Sales Revenue (Dryers) Inventory Inventory on Consignments Cash Unearned Service Revenue (Maintenance Plan) Accounts Receivable Payable to Consignor Unearned Sales Revenue (Dryers) Sales Revenue Service Revenue (Maintenance Plan) Unearned Service Revenue (Installation) Finished Goods Inventory Unearned Sales Revenue Service Revenue (Installation) Refund Liability Commission Expense on Consignments Commission Revenue Notes Receivable (Mills) No Entry Cost of Goods Sold
	(To record sales revenue)
January 1, 2014	Finished Goods Inventory Service Revenue (Maintenance Plan) Sales Revenue (Dryers) Commission Revenue Unearned Service Revenue (Maintenance Plan) Service Revenue (Installation) Notes Receivable (Mills) Payable to Consignor Unearned Sales Revenue (Dryers) No Entry Refund Liability Sales Revenue Commission Expense on Consignments Inventory Unearned Sales Revenue Cost of Goods Sold Estimated Inventory Returns Cash Accounts Receivable Unearned Service Revenue (Installation) Inventory on Consignments
	Commission Revenue Notes Receivable (Mills) Finished Goods Inventory Estimated Inventory Returns Unearned Sales Revenue (Dryers) Service Revenue (Maintenance Plan) Inventory Sales Revenue (Dryers) Unearned Service Revenue (Maintenance Plan) Service Revenue (Installation) Cost of Goods Sold Accounts Receivable Cash No Entry Unearned Service Revenue (Installation) Payable to Consignor Refund Liability Inventory on Consignments Commission Expense on Consignments Sales Revenue Unearned Sales Revenue
	Sales Revenue (Dryers) Sales Revenue Unearned Sales Revenue Service Revenue (Maintenance Plan) Estimated Inventory Returns Service Revenue (Installation) Payable to Consignor Unearned Service Revenue (Installation) Unearned Sales Revenue (Dryers) Notes Receivable (Mills) Accounts Receivable Unearned Service Revenue (Maintenance Plan) Commission Revenue Cash Inventory Refund Liability Commission Expense on Consignments No Entry Inventory on Consignments Cost of Goods Sold Finished Goods Inventory
	(To record cost of sales)